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Born in Kingston upon Hull, Mackaill lived with her father after her parents separated when she was eleven. She attended Thoresby Primary School. As a teenager, Mackaill ran away to London to pursue a stage career as an actress. After temporarily relocating to Paris, she met a Broadway stage choreographer who persuaded her to move to New York City where she became involved in the Ziegfeld Follies and befriended future motion picture actresses Marion Davies and Nita Naldi.

In 1924, Mackaill rose to leading lady status in the drama The Man Who Came Back, opposite rugged matinee idol George O'Brien. Her role of the nightclub chanteuse Marcelle catapulted Mackaill into a genuine Hollywood star and her career continued to flourish throughout the remainder of the 1920s. In early 1924 she starred in the western film, The Mine with the Iron Door, shot on location outside of Tucson, Arizona. That same year she was awarded the WAMPAS Baby Stars award by the Western Association of Motion Picture Advertisers in the United States, which honored thirteen young women each year who they believed to be on the threshold of movie stardom. Other notable recipients of the award that year were Clara Bow, Julanne Johnston and Lucille Ricksen.[2]

Mackaill made a smooth transition to sound with the part-talkie The Barker (1928) and had success in talkies for the next couple of years. First National Pictures was acquired by Warner Brothers in September 1928, and her contract with First National was not renewed upon its expiration in 1931. Her most memorable role of this era was the 1932 Columbia Pictures release Love Affair with a young Humphrey Bogart as her leading man. She made several films for MGM, Paramount and Columbia before retiring in 1937 to care for her aging mother.

In 1955, Mackaill moved to Honolulu where she remained for the rest of her life.[3] She had fallen in love with the islands while filming His Captive Woman in 1929. [4] Mackaill lived at the luxurious Royal Hawaiian Hotel on the beach at Waikiki as a sort of celebrity in residence and enjoyed swimming in the ocean nearly every day. [5] She occasionally came out of retirement to appear in roles for television, notably in two episodes of Hawaii Five-O in 1976 and 1980, which was filmed on location in Hawaii.

Mackaill was married three times. Her first marriage was to German film director Lothar Mendes, whom she married on November 17, 1926.[6] They divorced in August 1928.[7] On November 4, 1931, she married radio singer Neil Albert Miller.[8] They divorced in February 1934.[9] Her third and final marriage was to horticulturist Harold Patterson in June 1947.[10][11] Mackaill filed for divorce in December 1948.[12] She had no children from any of the marriages.